2010 Top 10 Creditor Scams

Even with our national economy showing some signs of recovery, many Americans live in financial fear. Last year, a record 2.9 million properties were flagged with foreclosure filings, and jobless rates hovered around 9 percent. Struggling to make ends meet, some families suffered income loss and mounting debt as a result of the recession and, in desperation, became victims of financial scams. Each year, Consumer Affairs (CA) publishes its Top 10 list of deceptive schemes. In 2010, the list included those scams victimizing those hardest hit by our nation's current financial crisis.

Everything that sounds good is not always golden, as indicative of the top scams of last year. The Top 10 included:

  • Foreclosure rescue
  • Fake debt collectors
  • Charitable fraud
  • Job opportunity scams
  • Facebook hacker scams
  • Gold scams
  • Debt settlement schemes
  • Investment/Ponzi schemes
  • Unauthorized credit charges
  • Timeshare sales scams

While these scams generally targeted those seeking financial opportunities and sale of property, many state attorneys general have begun prosecuting these deceptive agents, and a number of consumer groups are issuing warnings to the general public.

Some of the most disturbing scams last year included foreclosure rescue scams and fake debt collector schemes. Under these two classes of scams, people become targets and are often left emotionally (and sometimes financially) devastated — going through everything from the downfalls of home foreclosure to the threat of arrest and creditor harassment.

Foreclosure has become an increasingly troubling issue for families, and those desperate to save their homes might turn to programs that purport to offer assistance. The federal government has programs to help these distressed homeowners, but many consumers are unsure of how to take advantage of them, so they seek help from companies they perceive as legitimate. In reality, homeowners are charged lofty fees and are many times left in worse financial positions with their lenders.

In the case of debt collection, federal law offers protection through the Fair Debt Collection Practices Act (FDCPA). This protection helps prevent abusive and harassing practices of collections agencies and debt collectors. However, many consumers don't know the extent of their rights and become targeted by collectors who make threats of criminal prosecution. Many collectors rely on bullying consumers into paying their debts — sometimes debts that aren't even theirs.